Varian Medical (NYSE:VAR) saw shares slump after posting Q1 earnings that missed the Street and saw profits and earnings per share shrinking.
The Palo Alto, Calif.-based company reported profits of $89 million, or 92¢ per share, on sales of $757.1 million for the 3 months ended January 1.
That adds up to a 4.6% bottom-line slide while sales grew 2.6% compared with the same period last year.
After adjusting to exclude 1-time items, earnings per share were 99¢, down 2¢ from last year and 13¢ off Wall Street analysts expectations. The Street was looking for $798.2 million in rev, which Varian missed by $41.1 million.
Shares have dropped after the release, sinking approximately 3.6% to trade at 74.92 as of 1:25 p.m. EST.
“Company revenues and earnings came in ahead of expectations for the 1st quarter. Revenue growth was driven by our oncology systems and particle therapy businesses while the imaging components business continued to experience expected pressures on revenues. Our earnings performance was helped by our revenue growth as well as strong SG&A cost controls and an R&D tax credit,” CEO Dow Wilson said in prepared remarks.
Varian released updated outlook for 2016, expecting non-GAAP earnings between $4.55 and $4.65 for the year and $1.06 and $1.10 for the 2nd quarter.
“Including the effects of the R&D tax credit re-enactment and the suspension of the medical device excise tax in the U.S., we now believe that for fiscal year 2016 total company non-GAAP earnings will be in the range of $4.55 to $4.65 per diluted share. We continue to expect that revenues for fiscal year 2016 will increase by about 4 to 5% over fiscal year 2015. For the 2nd quarter of fiscal year 2016, we expect revenues to be up 1 to 2% from the year-ago quarter in dollars. We expect non-GAAP earnings for the 2nd quarter of fiscal year 2016 to be in the range of $1.06 to $1.10 per diluted share,” Wilson said in a press release.
